About Short Sales
What are short sales? It’s when a lender is accepting less
than the total amount due. Not all lenders will accept short sales,
especially if it would make more financial sense to foreclosure.
There could be drawbacks. Only lawyers or CPAs’ can give
advice of those consequences.
There are many ways to lose a home but signing away ownership
in a manner that ruins credit, embarrasses the family and strips
an owner of self-esteem is one of the hardest. For owners who
can no longer afford to keep current mortgage payments, there
are options to bankruptcy or foreclosure proceedings. One of those
options is called a "short sale.”
Be aware that IRS will consider debt forgiveness as income, and
there is no guarantee that a lender who accepts a short sale will
not legally go after a borrower for the difference between the
amount owed and the amount paid. In some states, this amount is
known as a deficiency. A lawyer or CPA can determine whether your
loan qualifies for a deficiency judgment or claim. Lenders may
have different condition and may require that borrower present
a wide selection of documentation.
